Global Jesuit Dialogue on Business Ethics

THE DHAKA FACTORY FIRE: WHO IS RESPONSIBLE?

Tuesday, Jan. 22, 2013

Case by Saayeli Mukherji and Noah Rickling, both Seniors at Santa Clara University and Fellows in Business Ethics at the Markkula Center for Applied Ethics at SCU

BACKGROUND: The largest Bangladesh factory fire in recent times killed 112 people this last November. This horrible incident raises once again the dilemma of who bears responsibility in such a tragedy. As we examine this case, we have singled out specific players who might bear significant responsibility for this particular event. The Bangladeshi government has the dual responsibility of taking care of its citizens as well as maintaining its economy by supporting the $20 billion a year garment industry that serves as 80% of its total export earnings. The workers, mostly women, earn as little as $37 per month and depend on the government for their safety; however, corruption runs rampant in Bangladeshi politics and the country is currently ranked 142nd out of a 176 countries according to the Transparency International Corruption Perception Index. In this case, there are also implications of arson to further political interests of specific parties. Additionally, the owner of the factory constructed five more illegal floors beyond the original structure, and the factory location was in an area that large vehicles, specifically fire trucks, could not easily enter. Major international retailers have often been criticized for not taking responsibility for their subcontractors; companies whose products were produced at this particular factory include major retailers such as Walmart and Sears.

THE QUESTION: Do you think that it is the government’s responsibility to enforce safety regulations and bring these factories up to date, or should more be done by multinational corporations that use these factories in order to ensure the safety of their supply chain employees?

OUR RESPONSE: We assign the majority of responsibility in this case to the government, which has failed to protect its citizens and factory workers on multiple occasions. This most recent factory fire, although more deadly than any in recent memory, is unfortunately not a rarity in Dhaka. The Bangladeshi government fails to properly enforce safety standards they set because of the fear of the impact that those regulations would have on the garment exports. Although there has been an initial outcry against major companies, such as Sears and Walmart, who have subcontracted labor to different Bangladeshi factories, we believe that they are less culpable than the Bangladeshi government because of their degrees of separation from the actual event. Although we recognize the financial constraints and the associated corruption faced by the Bangladeshi government, we believe that only a local authority could create significant change in how safety is valued.The bottom line is that if the government regulations were properly enforced, factory fires, which are all too common in Bangladesh, would reduce in number resulting in safer working conditions for factory employees. Bringing these factories up to code would, however, create another cost for factory owners. This cost could either cut into the owner’s profits, cut the wages of factory workers, or be paid for by an increase is production costs paid for by subcontractors, which would be passed on to the multinational corporations that use these facilities to create goods. Ultimately, there is a tradeoff here between profit and safety. It has been estimated that a quarter of the factories in Dhaka are not up to current safety codes. If the government enforces these regulations, there will be less business generated because costs would increase, but the factory employees would be able to work in a safe environment and disasters like this fire would become much less likely.

YOUR RESPONSE: Who do you think bears responsibility for this tragedy? What other ethical frameworks (social, political, etc…) can help unpack this complicated scenario? How would you use these other frameworks to decide who is responsible? We look forward to hearing what you have to say and to entering into a conversation with you.

Comments

Ritaban Sengupta said on Jan 25, 2013

In the war of kings, it is the soldier who dies. Incidents like these bring into foray how nexus between corrupt government and greedy factory owners lead to the death of common factory workers. Be it the Dhaka factory case, the Bhopal Gas Tragedy or the Kolkata Park Street mishap; all these incidents point to a single conclusion: Lack of humanitarianism on behalf of both the Government and the affluent factory owners.
Why did the Government permit the building of five additional floors? Why was permission given to construct a factory without necessary accidental precautions? Is ensuring safety features for workers a very costly proposition for the owners of these factories?
We have learnt to remain silent. The initial reaction is to blame foreign companies whose products are manufactured there. It has become a trend to accuse people outside our boundaries of anything and everything that happen.
Then what could be the solution? Just a promise by the Government wouldn?t work. We have had enough of it. So what is the way forward? In my opinion, besides stringent regulations, fast track courts must be setup to deal with incidents relating to workplace accidents. Harshest punishments should be meted out to the guilty. Secondly, highest safety standards must be ensured in the factories. If owners couldn?t afford the money, the government along with the private companies must assist them in every way to ensure that the standards are met, followed by vigilant periodic checks. Only then the factories should be given the permission to manufacture.
This mishap is not limited only to the death of 122 people; it is an irreparable loss to their families especially for those where the victims were the sole breadwinners. As goes the saying, "Hit the rod when it?s hot", regulations have to be passed as soon as possible, otherwise such incidents would become imminent in the future.
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Saayeli Mukherij said on Jan 29, 2013

Ritaban,
I agree- this is the time to see if legislative changes can happen when "the iron is hot". We can all suffer from a lack of humanitarianism as we buy from international corporations but forget the "soldier", or the individual who created the items. I like your point about fast track courts. Can you explain a little bit more on how the fast track courts are working in India?
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Ritaban Sengupta said on Jan 30, 2013

To be brutally honest fast track courts are like the adage "the night is darkest just before the dawn".Crimes,corruption,mal practices all refer to the darkness and fast track courts being portrayed as the dawn.I will give u some simple facts :
1.There are over 43 lakh cases pending in the high court.
2. 1.8 lakhs in magistrate.
3. 58000 in supreme court.
If one appeals to higher courts his hearing comes at a time when he is almost breathing his last. U might have heard about a certain rape case that took place in Delhi.Media went crazy, people went berserk, a strong appeal was made to set up fast track courts at least for cases pertaining to atrocities against women.But as i sad its easier said than done. I personally feel that inefficient judiciary system, and peoples faith in bribery and corruption are the major reasons why incidents such as these occurs these frequently in developing nations.
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History repeats again. This is not the first time when such an incident has happened. There are countless cases where the lack of regulatory control has resulted in major accidents. The Bhopal Gas Tragedy is still a drop of tear for the Indians in this regard. As it was in those cases, in this case too, it is the government of the country which holds the primary responsibility of the incident. The incident also unmasks the corruption levels in the country. The number of extra floors constructed illegally, is a direct indication of the levels of corruption. Apparently, there were no fire exits in the building. Poor wiring, slack safety standards and overcrowding are some of the major reasons for the deadly fires that often occur in the factories in Bangladesh. This can happen only due to the floppiness of the regulatory bodies.
I feel that it is the duty of any government to ensure the safety of its citizens. Proper and safe working conditions are the rights of any laborer. The costs of putting the safety aspects in place should not be considered as a burden or an extra cost element. If neglected, the repercussions would hit back in the form of such incidents. I also feel that the economic condition of this country compels the laborers to work under hard-hitting conditions to earn their bread. It is time that the government wakes up to such incidents; else such disasters are bound to repeat. The reaction of the society then might not be similar every time.
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Saayeli Mukherij said on Jan 29, 2013

Slack safety standards indeed make a huge difference in the lives of the workers. Although proper and safe working conditions are the rights of laborers, is it indeed the contentious issue of who should bear the cost. Although foreign companies may be in the monetary position to bear the cost, unless the safety is demanded by the national governments, the companies would have little incentive to ensure safety. Thus by default the government must take the lead in creating safety and requiring minimum safety requirements, and then pass the cost along to the foreign corporations. Overall, I agree that if these type of situations are neglected then repercussions such as this fire will be fairly common.
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Swathipriya Venkatesan (Loyola Institute of Business Administration, Chennai) said on Jan 25, 2013

I believe that that there is no single authority responsible for this tragedy. It is the joint responsibility of the Government, the factory owners as well as the multinational corporations to ensure the safety and well-being of the factory workers. In this case, all of them have failed to do so. The government has clearly displayed a lack of responsibility in the strict enforcement of the safety standards due to fear of losing out on the export business front. Though the Government faces financial constraints and the never ending problem of corruption, these cannot be stated as valid reasons to shun away from the responsibility of
The Government shares the burden of such tragic accidents in Bangladesh. But they are not the only ones who are guilty. The factory owners also have an equal responsibility to ensure appropriate working conditions and safety standards for their employees. If their focus is only on the profits and not on the employees who are responsible for bringing about those profits, then such accidents are bound to occur more often. The multinationals that indirectly exert pressures on the factory owners and the Government to achieve their personal interests, should also be held liable for such happenings. Basic morality and ethics expected from such huge multinationals are often not fulfilled by these companies. The only solution to such tragedies will be a joint effort by the Government, the factory owners and the multinationals to ensure appropriate safety standards for the factory workers, though it may incur additional costs. The concerned parties should show some humanitarian considerations and not restrict themselves to monetary benefits. Other factors indirectly responsible for this tragedy are the corruption rates, political influences and personal interests which will take some time to be curbed.
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Saayeli Mukherji said on Jan 29, 2013

Swathipriya,
I agree that all three parties (multinationals, factor owners, and the Government) are equally responsible for this tragedy. Ideally, all three parties would reform their actions and yet I believe there needs to be a leader who takes charge of the situation. In this case, I think the government is best suited for the challenge as it understands the needs/wants of the local people, factory owners, and the multinationals. The Bangladeshi government needs to lead the way and enforce their own regulation to ensure that multinationals and factory owners follow suit.
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Rohit George (Loyola Institute of Business Administration, Chennai) said on Jan 25, 2013

I would put the blame on the government as it is their duty to ensure safe working conditions for factory workers. But I also feel, that the multinational companies that use these factories to get their products manufactured are equally responsible. It is evident that the main reason why these companies come to Bangladesh is due to the availability of cheap labour. Even though the companies were not openly involved in this disaster, it is their moral responsibility to ensure safe working conditions for the factory workers, irrespective of the fact that they were not directly employed by them. The sloppiness of the factory owners with regard to the infrastructure standards, is also obvious from the illegal construction of five additional floors beyond the original structure. In the wake of these disregards, the occurrence of such a disaster was only a matter of time.
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Saayeli Mukherji said on Jan 30, 2013

Rohit,
You make a great point about the morality of the multinationals being questioned with this recent fire. It is astounding me to how much of the guilt gets moved around, specifically as the multinationals direct the blame at the subsidiaries which employ the local workers and the factories. These middle men are hardly singled out for their participation. Overall, I do agree that multinationals need a better moral compass but I think they will only comply to government regulations or individual protests.
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Divya Thachankary (Loyola Institute of Business Administration, Chennai) said on Jan 25, 2013

While researching about this case the most glaring fact that struck me was - At least 500 people have died so far in clothing factory accidents in Bangladesh since 2006. So this is in fact, a common phenomenon in Bangladesh. They are infamous for the poor working conditions in these factories.
A huge part of the blame falls on the government. The fact that fires have become a recurring phenomenon, itself goes to show how ineffective the government has proved to be. The prime minister seems to be attributing it on arson, but what about the fact that the factory's fire insurance had expired in June ,2012? Isn't it their responsibility to make sure that a factory is working with the required permits? The main reason why the government looks the other way is because garments are the biggest contributors to the export business. So whenever a fire or accident occurs, the government sets up an investigation and the authorities ? including the factory owners ? dole out some money and hold out assurances to improve safety standards and working conditions. But they never do it. "Unless the government changes this attitude, we cannot hope to bring about any concrete changes.
The others who are answerable are the multinationals companies like Walmart and Sears. It is shameful that companies with such levels of repute, resources and branding express their inability to track where the suppliers acquire their products from. It is the responsibility of these companies to find out exactly how are they sourcing their materials and to whom? Ignorance is not unpardonable.
No bottom line is more important than a person?s life. Therefore proper rules and procedures with heavy penalties for default, need to be implemented and multinational corporations like Walmart should be held accountable for their actions or lack of appropriate actions thereof.
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Saayeli Mukherji said on Jan 30, 2013

Divya,
Great point on the fire insurance being expired! I agree that factory fires have become too common, almost a side product of the garment industry. I also agree that multinationals should share in the blame and I agree that ignorance cannot be a shield. However, if the government is having a difficult time enforcing fire safety rules, it is increasingly even harder for a corporation, not based out of Bangladesh, to properly ensure safety regulations. The key is for the government to create better safety regulations and require multinationals to abide by those rules. I feel that the change must begin internally to be recognized and followed by all parties.
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Farha KV (Loyola Institute of Business Administration, Chennai) said on Jan 25, 2013

Although the primary responsibility of the unfortunate event lies with Bangladeshi government, we can't ignore the role of multinationals who are earning huge profits, thanks to outsourcing. Walmart - which reported an annual profit of around $120 billion in 2012 and also other similar business entities, who use these factories should ensure that the subcontractors are providing safe work environments to the employees. They can and should use a small portion of their profits to economically support their supply chain partners from the third world. We can't discount their moral responsibility in this era of boundaryless organisations.
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Noah Rickling said on Jan 29, 2013

Walmart has stated in the past that it is not ?economically feasible? for them to pay more for better working conditions for their supply chain. While I personally don?t agree with their exploitation of their supply chain in both the first and the third world, it is part of their overall strategy to increase their profits. If they are not willing to pay extra for worker safety, something has to be done to protect the workers. That is where the government needs to come in and act as a regulatory body ensuring the safety of its citizens. The costs will eventually be passed onto the multinational corporations. Holding the government responsible also allows them to act as a regulatory body that can check how safe these factories actually are or shut them down until they are deemed safe. This ensures that the money generated to improve worker safety actually goes towards that cause instead of stuffing the factory owner?s pockets.
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Eldho Poulose (Loyola Institute of Business Administration, Chennai) said on Jan 25, 2013

It is only natural for one to hold the government of Bangladesh responsible for this tragedy, because such fires are far too common and it is up to the government to sort this out. However, on a closer analysis, one cannot but believe that in a country like Bangladesh, the government interference can only complicate things. Government intervention can lead to a lock down and loss of jobs for the workers. In a country where the workers cannot even imagine missing out on a day?s labour, it would be disastrous, to say the least if something like that happens. On the other hand, if the foreign customers who place their orders with these factories come together and take a strong stance saying that they would not provide them orders until they are sure of proper safety measures, a proper solution can be worked out for the problem. The factory owners cannot afford an argument in such a case. Hence, it is up to the customers to push for stricter norms until the safety guidelines are met. They are well aware of the situation of workers in such countries but their ?we don?t care? attitude must change for such incidences to never happen again.
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Noah Rickling said on Jan 29, 2013

If the foreign customers of who place orders with these factories do come together and demand that safety standards are met, then the factory owners would definitely take notice and act. This would be ideal, but not very likely to occur. One issue here is with the amount of work necessary to ensure that the factories are actually kept up to standards. Should this be the job of the multinational companies? Who is to say that the extra money coming into these factories to increase the safety actually goes to that cause? The government is needed here as a regulatory body that can enforce safety standards and hold factory owners accountable. While this does compromise factory workers in the short term by forcing factories to be brought up to the minimum safety standards, it increases their safety in the future ensuring events like this won?t happen in the future. Also these costs of being brought up to date can be passed back onto multinational companies through marginal increases in prices.
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Lakshman Aram said on Jan 27, 2013

Though the case study is about Bangladesh, I am sure the people of India, like myself are all too familiar with incidents like these. I think the majority of the blame lies with the Government because it has failed to perform its stipulated duty. Moreover, when there is a corrupt Government at the helm, the multinationals too may not be that forthcoming with any ideas that might offer a win-win situation.
Take the example of the famed PPP (Public-Private-Partnership) model of growth that has been hawked in Bangalore, India. The issue was that of the crumbling infrastructure in the Silicon Valley of India. The political class did not budge when the idea was floated by the industry big-wigs, who wanted the private firms and the Government bodies to cooperate and improve the infrastructure of the city. The end result is that the situation in the city is turning worse with each passing day. India, like Bangladesh, is under a siege by corruption, with new scams hitting the headlines on a daily basis. So what could be the way out?
In the few incidents where the Government has been forced to act like the New Delhi rape case, the citizens were out on the street to demand justice. This is the way forward for the Bangladeshi worker, who needs to ensure his voice is heard not only by his /her Government, but by the international media as well. Once they garner support, not only the MNCs but their own Government will be forced to act under international pressure. Though the issue of profits might be on the minds of the Government, one needs to understand that a minimal standard of safety is a right of every individual. Only then, can the worker contribute to the maximum and only then, can the nation improve its well-being. An example could be Nike, which developed a more humane working environment for its workers in its Chinese factories. This was again brought about by a global outcry against the human rights violations in the Chinese firms.
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Noah Rickling said on Jan 29, 2013

This is a great point. International pressure is a great agent of change. The workers in Bangladesh could be an extremely powerful force if they decided to stand up for themselves and demand a certain standard of safety. I hope that the press coverage this fire received worldwide at least starts a dialogue for real change. This change is slowed drastically by corruption on many different levels. Our solution depends solely on a government with a history of corruption. The Bangladeshi government needs to be transparent moving forward and put the safety of its people of the overall profit of its garment industry. This won?t happen all at once, but raising the standard the government has set in the past is essential to creating a safe environment for the Bangladeshi factory workers.
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Meera Elizabeth George (Loyola Institute of Business Administration, Chennai) said on Jan 27, 2013

Yet another Tragedy ? the Dhaka Factory Fire has people rushing forward to justify themselves and place the blame on others. But then how does it all end? Like with every other catastrophe, it all dies down before we even know.
Who is to be blamed? Every single person is responsible here.
The Government - Bangladesh is the world?s biggest exporter of clothing after China, as it is just easier to exploit workers in the country for subpar working conditions and inferior wages, because they have less protection. The government is responsible to safeguard the worker rights and protect the citizens and they have failed miserably and fallen into the traps of corruption. The Factory Owners - Lax safety standards, poor wiring and overcrowding are blamed for causing several deadly factory fires every year. Many of the fires could have easily been avoided if the factories had taken the right precautions. The Foreign Clients - The companies shouldn't do business with factories that employ workers in such dangerous conditions and for such little pay. The brands have known for years that many of the factories they choose to work with are death traps, their failure to take action amounts to criminal negligence. The Workers - For their Ignorance and for not fighting for their Rights before the things got worse. For e.g. Fire extinguishers in the building were left unused as the workers didn't know how to use them.
If Attention is not on the stability of the community, and of the health of the environment, but upon to satisfy the greed?s of the society, chances are that the quality of our lives would be worse than it is now. People should stop blaming each other, own their mistakes and work towards a better tomorrow.
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Noah Rickling said on Jan 29, 2013

Working toward a better tomorrow should be on the minds of all parties involved in this fire. Every individual is thinking of short term gains rather than sustainable, long term solutions. It only takes one of these parties to act as a responsible authority to make sure that catastrophes like this don?t happen due to a lack of action. Beyond an authority, I believe that the parties do have to work together in order to come to change about the safety standards of the workers. This starts with the government regulating the safety standards in an unbiased way. It follows by multinational corporations paying marginally more in order to offset the costs of the safety issues. Every person involved with this is responsible, but the government has the ability to enact immediate change and start a domino effect which leads to the ultimate goal of higher safety standards and less worker casualties.
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Emil Dy (Ateneo de Manila University) said on Jan 31, 2013

I would like to begin with an assumption. The factory owners operate their business precisely because there is profit to be had; to say that business will fall due to the added costs of following regulations and imposing security measures is to imply that these costs are much more significant. Let us take this assumption, because if costs can easily be covered by the profits then the case devolves into an issue of greed on the factory owners' parts. Next we will have to uncover the possible reasons behind why the factory owners chose not to spend on security. A qualitative cost-benefit analysis follows below, which is a powerful tool in rational decision-making.
I believe that the issue here is not so much about who is to take responsibility but is more of a classic dehumanization case in which all parties concerned -- the government, the factory owners, and the multinationals outsourcing their work -- consider the factory workers as mere commodities. Given a high risk of fire, a rational employer would take measures (reasonable in cost) to lower this risk of fire for three reasons: one, a fire results into expenses in the form of product damages, repair and replacement of fixed assets, loss of credibility to customers, and finally financial support for the wounded and deceased as well as training costs for new employees. In any work that requires skilled labor and with a reasonable learning curve, that last expense should have been big enough to spur the factory owner to spend for security measures; unfortunately, labor is cheap and menial, considered easily replaceable and homogeneous. Second, a fire incurs lost revenues for the factory owner. We have to recall that these factories operate at a cost leadership strategy, selling cheaply but in large volumes. Any interruption in operations is unwanted, costly, and a threat to the existence of the business itself. Third, from a capital expenditure perspective, the costs of following regulations and implementing security measures have more to do with an initial investment rather than regularly recurring fixed costs. Take for example the building of fire escapes, or acquiring machines that act as fail-safes to electrical equipment. The initial investment may be too large a bite out of the profits for the given time period, but considering the relative stability of the manufacturing industry for garments and the wide range of security measures available, from cheap to expensive, these initial investments would have been recovered in no time.
Given these reasons, a rational employer would indeed take measures, even if in the short-term costs would be greater than profits. In the long run, he is better off that way. The only time he would not is if the expected value of these costs and the probability of a fire is smaller than the costs of the security measures -- or if the only consideration is short-term profits, in which case greed is yet again at play, supplemented by the abovementioned view of factory workers as cheap and easily replaceable commodities. Assuming that the factory owners are indeed rational, I thus hold that they are both guilty and responsible for the tragedy.
When talking about the roles of government and the multinational firms engaging the services of such factories, I feel that an honest appraisal requires the delineation of guilt and responsibility. It looks to me that the role of corruption is underestimated ? politically, a state is considered weak if it cannot stand up to the lobbying of various sectors to the detriment of existing laws and regulations, more so if these existing laws and regulations are already adequate and objectively necessary to safeguard the well-being of its citizens to begin with. Still, regarding the factory fire, I don?t think the government is to be blamed; I think the weak Bangladeshi state is guilty of being weak but not of the tragedy. It does, however, bear much responsibility, and this responsibility is forward-looking above all, although not forgetful of the past sin of omission.
This same line of thought can be applied to the factory?s overseas customers; as the casewriters keenly point out, the degrees of separation between these retailers and the factory workers (or the factory environment) should be factored in. Responsibility, yes, but guilt, perhaps not.
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Saayeli Mukherij said on Feb 5, 2013

Emil,
I completely agree that a better cost analysis regarding safety concerns should be considered. Often businesses are short sighted and do not factor in long term damages and the intangible value of reputation.
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Mayo Floro (Ateneo de Manila University) said on Jan 31, 2013

In this case, it is apparent that there is a sharing of responsibility between the factory-owners, the bangladeshi government, and the multinationals that operate out of these low-cost factories. However, I find that the one most liable in this case is the factory owner. Although it has been argued that the government must assume the most responsibility for the tragedy, it cannot be disputed that the culpability of the factory owner is greater as it is to his best interest, to his workers and the industry (if he were a rational individual) to put into place protective measures and to follow government regulations. Although it can be argued that profits are all that the factory-owner cares about, this in itself is not a justification for the conditions in the factor. That is to say that a rational long-term thinking factory owner would not risk his production and future production for fire insurance money. (Assuming that profits are high and are projected to remain so). On another point, yes, it is the government's responsibility to ensure that factories are following set regulations and policies but this responsibility is shared by the factory owner. As such, the factory owner bears the brunt of the responsibility for the fire first as 1) responsible for the safety of his works and 2) as a citizen of the Bangladeshi state whose duty it is to follow the law, regardless if the law is implemented or not and especially when the law is clear and concerns the common good. With that, the responsibility for the fire can be broken down to each actor as:
1) Government and officials- should be held responsible for not enforcing safety standards despite numerous incidents.
2) Factory owner-should be held responsible for not following safety standards or placing into place preventive measures (endangering the lives of his workers) and (if proven) corrupting government officials.
3) Multinationals-should be held responsible for not using their influence to keep local factories in check as it is also to their best interests that they project sound business practices regardless of the locale.
Therefore, all three parties share a part of the responsibility though the factory owner must answer for his actions or rather inaction on behalf of the safety of his workers. Though unfortunate that it takes a tragedy large enough to shake an entire nation into action, without a doubt, all three parties and the Bangladeshi people and state are responsible for future fires that will occur in the country given that this most recent one has been the largest and deadliest.
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Saayeli Mukherij said on Feb 5, 2013

Maya, I wholeheartedly agree with your breakdown of responsibility for governments, factory owners, and multinationals. Particularly, I do believe that multinationals have an influence that they are currently not utilizing to the best of their capabilities to pressure the local factories to keep safety in check. It is definitely in the overall best interest of these multinationals to project sound business practice.
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Dom Bulan (Ateneo de Manila University) said on Jan 31, 2013

From the background of the case, I would say that the factory owner would seem to be the ones who are most directly responsible for the incident. The fact that they constructed additional floors knowing that not only was it illegal to do so, but would more importantly compromise the safety of its workers is a clear sign of negligence and perhaps even greed on their part. This is without the consideration that the location of the factory itself was inaccessible in case of incidents such as a fire. The factory owner has direct jurisdiction over the management of the factory, which includes ensuring the welfare of its workers. This means that workers can demand directly from the factory owners humane working conditions, just compensation, and other pertinent safeguards.
This does not mean to say, however, that the government is totally without fault. Corrupt government practices as evidenced by the poor rating in the Transparency International Index will inevitably affect the garment industry, since they are accountable both to factory owners and the workers. However, this should be viewed from a more macro perspective, as we cannot expect the government to address every specific incident that happens within a particular sector. What it should focus on is the proper implementation of existing policies that protect workers and prevent such accidents from actually happening, as well as perhaps rehabilitation for the victims. Moving forward, the government should be more vigilant in monitoring the garment sector especially since it accounts for a huge percentage in its exports, so as to avoid similar instances from happening again. On the side of the multinational corporations, the best they could do in my opinion is provide aid and to demand an investigation on the matter, since while this is an item of cost for them, the circumstances may be too remote for them to actually directly intervene.
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Noah Rickling said on Feb 6, 2013

I see how you could blame the factory owner for their negligence and even greed putting profits before worker safety. Any job should have, as you said, ?humane working conditions, just compensation, and other pertinent safeguards.? These seem to have been overlooked by the factory owner in regards to the workers. I do however believe that, since the issue of factory fires is widespread rather than just this one isolated incident, the government now is more responsible because they have failed over a long period of time to enact preventative measures protecting their own citizens. Moving forward, after taking care of those who were affected by the deaths caused by the fire, I believe that the government should take a preventative stance rather than the reactive stance they seem to have been taking. By taking this preventative stance and enacting change in factory safety before fires occur, the government can control the number of events that occur. The government can take control of the safety of factory workers by making sure factories are kept up to current safety codes. Currently, they are not in control of the safety of workers and are in fact putting their citizens at risk by not regulating their safety. It is time for the government to take a stand for change rather than reacting to these widespread issues of blatant disregard of worker safety.
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Reg Onglao (Ateneo de Manila University) said on Jan 31, 2013

First, I?d like to analyze the case by noting that there are five stakeholders in this situation: (1) the Bangladeshi government, (2) Owner of the factory, (3) International Retailers (e.g., Walmart, Sears), (4) Bangladeshi garment industry workers, and (5) Bangladeshi citizens/people. The first three, I think, hold different degrees of responsibility, with the highest degree held by the Bangladeshi government. The last two are the ones most directly affected by any decision/action taken regarding factory fires.
Second, I agree that the Bangladeshi government has the majority of the responsibility, although I would like to expand the reasoning for this by mentioning the following: (1) Their [assumed] inaction to the previous factory fires have indirectly led to the failure to prevent the ones now, (2) their dual duty of taking care of its citizens (which I understand to mean as ensuring their safety) and maintaining Bangladeshi economy are both directed towards the good of its citizens, making them the aim and focus of any government decision, and (3) the expectations from the garment industry workers who depend on the government for their safety (rather than the factory owner). With the lack of accountability for its inaction, its duty?s focus on the citizens, and the expectations of its major stakeholders?together with the great impact of their decisions/actions (e.g., impose government regulations) on the last two stakeholders?this points to the majority of the responsibility and the action being under the Bangladeshi government. With this, I suggest that on their part, there should be a stricter enforcement of these regulations (and perhaps adding more regulations to ensure a higher level of safety) despite possible short-term profit loss for the garment industry as well as issues in executing such an action (due to issues of corruption and political interest).
Third, I would like to take a ?financial perspective? to add support to my recommended action for the government. Before this, I would like to propose that the dilemma articulation for the government would be: Safety of Garment Industry Workers versus Support Economy?s Profit. Now, from a financial point of view, it seems that the tradeoff here actually is Safety & Long-term investment versus Short-term Profit. I think this is valid given the case?s fact that 80% of total export earnings come from the garment industry, thus making the factory?the building, the furniture and equipment, important company files?and its workers to be highly valuable to the country?s economy. Although garment-making may perhaps be an easily acquired-skill, perhaps higher-level garment making?which may produce garments of higher quality, thus leading to higher gains in the garment industry?which may be taught to the employees would make more indispensable and thus making them greater ?investments? for the company. (Of course, I would not want to treat people as mere ?investments? but again, I am taking a financial perspective here, given that a major conflicting value for the government is supporting its economy?s profit.) I have seen that most multinational companies?Procter & Gamble, for instance?are able to reap in higher profits by investing in their employees and their company. With this reasoning then, is it not a financially better trade-off to ensure the safety of the workers as well as the non-destruction of factories (which may have high capital expenditure costs as well as equipment costs for garment-making) through government regulations, at the cost of a reduction in short-term profit? Actually, even if we look at the case from the view of short-term financial impact, it seems that the reduction in profit is smaller than the losses incurred from the fires (i.e., employees were killed and the building, finished garments and flammable raw materials (e.g., cloth, thread)). It seems then that having stricter regulations and enforcement for the safety of the workers as well as the factory building and equipment is the ?cheaper? alternative. Thus, this action would be upholding both values of safety of garment industry workers as well as supporting the economy?that is, they don?t seem to be in conflict anymore.
Fourth, I?d like to add that both the multinational companies as well as the owner of the factory must also be held responsible?although to a lesser degree than the government?since their actions have indirectly led to these factory fires as well. Granted, the impact of their possible actions may be little compared to that of the government?s (due to distance and/or lack of means to directly affect garment factories); however, this does not mean that minor accountability?and action?on their part is dismissible or dispensable.
With this, I would like to propose that the multinational companies may opt to have safety standards or criteria in choosing their subcontractors, which would indirectly encourage subcontractors such as Bangladeshi garment factories to uphold these safety standards. Of course, this would lead to lesser choices for subcontractors and higher prices (as the subcontractors may justify a price increase for their inventory as a result of the costs from following stricter safety criteria), but this seems like a good tradeoff for the multinational companies who would then be able to regain (or perhaps, improve) their global reputation as companies who prioritize safety.
Lastly, I would also like to propose that the owner of the factory may, through government regulations, be held responsible for the compensation of the death and damage done to affected employees and their respective families due to his/her actions which indirectly led to the fire.
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Noah Rickling said on Feb 6, 2013

I believe that you are correct about the tradeoff between long term sustainable gains and short term profits. Sacrificing investment in a stronger future in order to make relatively small gains now is a short term solution that leads to problems such as these factory fires down the road. It is also important to see each stakeholder and see how they are affected by the tragedy. I believe that the government is most at fault because they also have the most opportunity to enact real, widespread change and positively affect the country and their export garment industry as a whole. They have currently failed to do this, but by adopting a transparent approach to safety, they are allowing for a long term investment in their already thriving garment exporting industry that is sure to be beneficial for everyone in the long term.
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Angela Poe (Ateneo de Manila University) said on Feb 2, 2013

By dint of direct involvement in the incident and the creation of an environment that encourages (or fails to discourage) such incidents, the factory owner and government bear the most responsibility for this situation. On a micro scale we?d assign culpability by simple cause and effect: the factory owner and local government offices that issued construction orders and permits, despite obvious safety hazards, knowingly increased the risk of disaster and transferred this risk to the factory workers ? which would be wrong whether or not the fire had taken place ? so they would share the burden of paying for damages, fines, bringing the factory up to code, and henceforth allowing construction only when safety standards are met. But in the long view, which does not hold tragedies like this in isolation, the task is not only to assign guilt and collect payment for the Dhaka fire but also to prevent tragedies like this from happening again. If that is the goal, then all who are committed to creating/upholding more responsible practices (e.g. government, textile industry associations) and all stand to gain from them (e.g. multinational corporations, textile workers, even citizens of Bangladesh who wish for a more just nation that is respected on the world stage) may be considered responsible for bringing them about ? in varying degrees and capacities, of course, depending not so much on degrees of separation but on one?s function. For instance, multinational corporations would be responsible for choosing good suppliers and demanding certification / running background checks before finalizing a contract, but it is not their duty to strictly enforce safety codes in Bangladesh or organize textile manufacturers into responsible and self-monitoring groups ? which is part of the government?s job. The trade-off between enforcing safety and encouraging exports is not an excuse for government inaction on this front, because (1) models exist that successfully marry an ordered society and a strong export economy; and (2) in the long run, the mix of corruption and impunity of business owners will not lead to sustainable and inclusive economic growth, nor to a society whose values and culture promote prosperity. Trying to elicit reactions based on guilt-driven notions of responsibility can be time-consuming, confusing (based on whose standards?), and often counter-productive; changing the discourse to a goal- or future-oriented one that engages more players and brings to light responsibility regardless of guilt allows the work of creating a better future to emerge even before the nebulous task of assigning blame is completed.
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Noah Rickling said on Feb 6, 2013

This is an excellent response. Just to clear some things up, when we mentioned degrees of separation in regards to multinational organizations, the point was to show how corporations like Walmart hire suppliers who then subcontract out production to factories in Bangladesh. This concept of being separated through different degrees is to say that it is not practical for Walmart who works through other companies to walk into a Bangladeshi factory and say that the safety standards need to be higher for them to use that factory. That being said, there is no reason for companies like Walmart and their subcontractors not to be as transparent as possible when reviewing factories in order to ensure that workers are treated with dignity and respect. Also, your point about function does help to clarify the role of each entity in the big picture along with a strategy that I believe focuses on a win win scenario rather than a win lose scenario. The win win scenario that I am talking about is your marriage of an ordered society and an export economy. I believe that this approach does require a long term plan rather than a short term approach and should be focused on more than just profit. Our original thought for the government to enforce these regulations was aimed at creating this type of society that focuses on the win win scenario of worker safety and a successful export industry. Thank you for this response Angela.
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Angela Poe (Ateneo de Manila University) said on Feb 10, 2013

Ahh, originally I thought that by "degrees of separation" you had meant geographical separation haha my bad. I agree that being only INdirectly involved in the selection of irresponsible suppliers (e.g. as you said, working with entities that in turn work with the Bangladeshi factory) mitigates the responsibility of MNCs to some degree. But even the less-guilty are just as responsible for win-win-win situations in the future. Glad we agree on the grand scheme!
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Bobby Ruiz (Ateneo de Manila University) said on Feb 6, 2013

While I believe that the Bangladeshi government surely has the responsibility of ensuring the welfare of its constituents (i.e. citizens), and that the MNCs should be a lot more scrupulous when having such dealings as in this scenario, I believe that the blame falls primarily on the shoulders of the factory owner. Any actions taken by the owner, which directly affect how their factory is run, are independent of the MNCs and the governments, though these two are strong influences in the consideration of such decisions. It is not as if the owner wished to build five more floors than what is permitted by extant safety standards just to induce a devastating fire; they did so, rather, to gain more, in less time, with smaller costs. Perhaps, the demand as fueled by the MNCs spurred more production. Furthermore, perhaps the ?malleability? of government officials was capitalized upon by the owner, in order to bypass any regulation that would have otherwise prevented the fire, or bigger yet, even the construction of the factory itself on a site with limited access. It is a saddening thought when the government itself cannot stop the advance of dubious business practices, but all the same we must realize that we cannot wait for the government to act for us. Indeed, we shouldn?t even have to wait for the government to tell us off before we figure out that our actions are wrong. On the part of the MNCs which patronize these businesses, they shouldn?t consider the numbers alone because I honestly believe that it is impossible for them not to know what conditions the workers are being subject to, let alone that factory fires are not uncommon in Bangladesh. The party with the most direct responsibility, as fleshed out herewith, is the owner. The owner should have realized that the adherence to safety standards is a boon in the long run. Not to sound indifferent to the plight of the workers by reducing them to mere assets, but if the factories were safe, they wouldn?t have to worry about catastrophes like this setting them back a good deal in reconstruction, restitution, and penalties imposed by the government (whether or not these penalties are opportunistic in nature).
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Noah Rickling said on Feb 6, 2013

I believe your argument is that by taking shortcuts in the short term to increase profits, the factory owner has subjected himself and his workers to the outcome of this fire, which is now a huge long term liability for him monetarily and ethically. It was his choice to build these five extra floors to remain competitive and be able to supply what the MNCs demanded. It was also his choice to put his factory and his workers at risk. He knew the potential consequences and he took a calculated risk to increase the output of this factory. You also said that ?we cannot wait for the government to act for us?. I agree that the owner of the factory made a poor decision sacrificing the safety of the factory workers for a short term gain. I would also say that the government, although usually slow to act, has failed to act completely all across the board. This is not an isolated incident. Blaming the singular factory owner for a risky decision that cost people their lives is looking at this case as an isolated incident. I am not saying that the factory owner is not at fault. I am rather saying that a multitude of these events occur involving numerous factory owners making it no longer the personal responsibility of the factory owner, but rather the responsibility of the government. It is not one incident, but rather many. I believe that if the government were to do it?s job and protect the citizens by enforcing safety standards, these events would cease to be a common occurrence and become a one off incident rather than business as usual.
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Jean Forbes said on Feb 14, 2013

While I agree that it is incumbent on governments to enforce safety regulations for the protection of their citizens; multinational also bear the responsibility of ensuring that factories that are set up in poor third world countries have the same safety standards that would be applicable were these factories set up in their own countries of origin.
I do realize that the reason for outsourcing to third world countries is that it makes the product cheaper, but how much is a life worth?
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Jim Whiting said on Jun 12, 2013

American corporations have contributed to the problems experienced by workers in outsourced manufacture. The operative word is greed not competitive business practice or the protection of the corporations investors. Greed trumps good judgement.
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rishi raj said on Nov 23, 2014

Dear Saayeli and Noah ,
I personally feel its a collective mistake of the Bangladeshi Government especially inspector viewing safety norms, second the MNC without having a sub-contracting standard and the factory owner. Best approach would be to have a system where expenditures for safety be in a ratio of 40 : 40 :20 respectively or any where equitability is the concern. A collective responsibility approach with improved enforcement may work better.
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